You may have heard about the infamous cryptocurrency BitcoinSV (BSV), which is a contentious hardfork of BitcoinCash (BCH). BSV was created by Craig Wright who self-proclaims himself as Satoshi Nakamoto – the original creator of Bitcoin (BTC), meanwhile imposing a narrative that «BitcoinSV is Bitcoin.»
I personally do not believe in Craig Wright. There are many reasons for this, but I won’t be writing about that in this article.
BitcoinSV is not Bitcoin, and neither is BitcoinSoV (BSOV).
I want to tell you about BitcoinSoV (BSoV), or «Bitcoin Store-of-Value», because I don’t want there to be any misconceptions about it.
At first glance it could seem like BSoV is a contentious hardfork of BSV, but I can assure you – it is not. Unlike Bitcoin and its contentious hardforks – BSoV is a completely new token where most of the tokens are not yet distributed. It is only distributed by mining it.
BSoV is the first deflationary and mineable token.
What? That doesn’t sound so special. Well, here’s another statement:
Bitcoin is not deflationary.
Well, well, well. This is not fake news. Continue your reading, please.
Introducing the ERC918 token standard
BitcoinSoV is a PoW-mineable ERC918 token – a smart contract which is secured by the Ethereum blockchain. The ERC918 token standard was first used by 0xBitcoin, and allows for distribution of tokens through real computing power a.k.a Cryptocurrency mining.
Unchangeable token & immutable code
However, unlike other proof-of-work consensus models, the ERC918 standard does not allow for any consensus mechanism to decide which parameters or functions to implement. Just like other smart-contracts on Ethereum – the code is immutable, or at least proving to be extremely difficult and expensive to alter, since a code-change would require dominant hashing power over the Ethereum network.
Organic community interest
Since the BSoV token does not have a team, it still doesn’t lack engaged and active community members. They didn’t join in because they were promised free money with airdrops, and no one were incentivized to create duplicate accounts unlike other deflationary projects such as ETHplode which has over 100,000 members in their telegram chat, I suppose most of them are fake.
Why does BitcoinSoV contain «Bitcoin» in its name?
There are three reasons.
- BSoV maximum supply is the same as Bitcoin.
- All BSoV tokens are distributed using proof-of-work mining, like Bitcoin.
- BSoV reflects the same disinflationary «halvings» of Bitcoin which occur about every 4th year.
Why does BitcoinSoV contain «Store-of-Value» in its name?
What makes BSoV unique to Bitcoin? Its deflationary attribute, where 1% of each transaction is destroyed forever – never to flow into circulation again. In the end, the total supply of BSoV will be less than 21 million. Whereas the original Bitcoin will end up with a constant total supply of 21 million coins which will be circulating forever.
This deflationary attribute of BSoV would be expected to have a reductive effect on token velocity, or in other words «the speed at which tokens circulate» as quoted from the first deflationary token experiment «Bomb Token», from which BSoV has taken its inspiration.
Basically, the asset holder is incentivized to hold, rather than transact. This mechanism; among others, is what makes BSoV more probable to be considered as a Store-of-Value. Though, getting there is extremely difficult.
In an article at CoinDesk, Kyle Samani, a co-founder of Multicoin Capital wrote about the token velocity problem and concluded:
Velocity is one of the key levers that will influence long-term, non-speculative value. Most utility tokens don’t provide a compelling reason for token holders to hold the token for more than a few seconds. Absent speculation, assets with high velocity will struggle to maintain long-term price appreciation. Hence, protocol designers will be well served to incorporate mechanisms into their protocols that encourage holding, not just usage.
The inevitable scarcity and disincentivization of making transactions are some of the key features of BSoV. There has also been developed a smart contract where holders can voluntarily lock their funds for 180 days, to further incentivize holding, and reduce token velocity.
Bomb Token vs. BitcoinSoV
Since BSoV is inspired by Bomb Token, it would be right to compare the two.
Bomb Token had 1,000,000 tokens instantly created, meanwhile BSoV has 21,000,000 distributed more over decades via mining.
Bomb Token does not have decimals, while BSoV has 8. In result, just like Bitcoin has Satoshis, BSoV has Mundos – This makes BSoV consist of a total of 2,100,000,000,000,000 units.
Max limit of transactions
Bomb Token is capable of less than 1,000,000 on-chain transactions until the total supply theoretically goes to 0. BSoV is capable of a lot more on-chain transactions and is designed to last longer. This allows for a broader distributed supply. In fact, 21 mill BSoV, divided by 7 billion people = 300,000 Mundos per person.
100% of the Bomb Tokens were first distributed instantly by airdrop to registered users, allocating 10% to the creators and 25% to community engagement. BSoV had no airdrops, no ICO and no «pre-mine» allocated to the developer(s). All of the BSoV tokens are distributed to miners who invest money in equipment and electricity; or to those who invest by buying, – Just like Bitcoin.
Now, let me tell you about why Bitcoin is not deflationary:
Deflation vs. Disinflation
Deflation occurs when the rate of inflation is below 0%, whereas disinflation occurs when the rate of inflation is slowly decreasing. If you don’t believe me, then look it up.
By this definition, and contrary to popular belief, it would mean that Bitcoin is not deflationary. Bitcoin is disinflationary.
Current inflation of BTC/USD/BSoV
Currently the rate of BTC-inflation is even higher than USD – For now, but because of the Bitcoin halvings, the inflation rate will become lower than USD and slowly disinflate to 0%.
When talking about the inflation of BSoV: These first 4 years will be exactly like the first 4 years of BTC. Inflation is high, but with reduced token velocity, and a high deflation from the destruction of transacted BSoV. It seems like it is a good balance. Who knows? We’re all part of this experiment. This token is just about two months old, so for me, this is very exciting.
Thank you for reading.
I hope you enjoyed reading my story.
If you would like to get into the community of BitcoinSoV, then visit the BSoV Community Telegram chat, because maybe you’d like to mine it with your GPU today?
BSoV is listed on CoinMarketCap, but does not have enough liquidity nor market pairings to have a listed price yet.
You may also check out the first BSoV website at bsov.io